Why gas prices are rising in the suburbs

  • Gas prices in the suburbs are on the rise again after months of averaging $2.50 or less for a gallon of regular. One Shell gas station at Dundee and West Frontage Roads in Palatine was charging $3.29 a gallon Wednesday.

      Gas prices in the suburbs are on the rise again after months of averaging $2.50 or less for a gallon of regular. One Shell gas station at Dundee and West Frontage Roads in Palatine was charging $3.29 a gallon Wednesday. Mark Welsh | Staff Photographer

  • Gas prices in the suburbs are on the rise again after months of $2.50 for a gallon of regular gas, much to the disgust of drivers.

      Gas prices in the suburbs are on the rise again after months of $2.50 for a gallon of regular gas, much to the disgust of drivers. Mark Welsh | Staff Photographer

  • After hovering around $2.50 for a gallon of regular, gas is costing as much as $3 or more in some suburbs like this station in Palatine.

      After hovering around $2.50 for a gallon of regular, gas is costing as much as $3 or more in some suburbs like this station in Palatine. Mark Welsh | Staff Photographer

  • Drivers like Lindsay Rodriguez of Arlington Heights are fed up with higher gas prices. She filled her tank at the Marathon station at Wilke and Campbell in Arlington Heights and paid $3.09 a gallon.

      Drivers like Lindsay Rodriguez of Arlington Heights are fed up with higher gas prices. She filled her tank at the Marathon station at Wilke and Campbell in Arlington Heights and paid $3.09 a gallon. Mark Welsh | Staff Photographer

  • A bit more at the pump

    Graphic: A bit more at the pump (click image to open)

 
 
Updated 3/26/2015 8:51 AM

Just when you thought it was safe to plan a road trip to California, gas prices are spiking in the Chicago region, causing a nervous tic in drivers haunted by the days of $4.24 a gallon for regular.

Fuel experts, however, anticipate gas will remain relatively cheap this summer and blame the usual suspects -- refinery issues and switching to a different blend -- for the shift.

 

A gallon of regular jumped from an average $2.50 in the Chicago metro area last week to $2.90 Wednesday, according to AAA. Some gas stations in northwest Cook County were charging between $2.99 and $3.29.

"I feel prices are going up because they know everyone will travel for the summer, so they're increasing the price to make more money," Lindsay Rodriguez of Arlington Heights said Wednesday while filling up her tank.

Julie Cox of Palatine added, "It's ridiculous to go so low and so high again."

The skepticism is understandable given the national average for a gallon of regular was $2.46 on Monday, a minimal change from $2.45 last week. according to the U.S. Energy Information Administration.

The switch to the summer blend of gasoline intended to keep emissions down in hot months is one culprit, AAA and government analysts said.

Summer blend fuel emits less pollution but is pricier to make. The Chicago version is unique because it uses ethanol, and the mix is produced only by a small number of area refineries.

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"A lot of people think it's just flipping a switch, but a lot of maintenance goes into it, cleaning out the old winter blend and putting in the new blend," AAA spokeswoman Beth Mosher said.

Problems with that process can lead to higher prices.

"If they're delayed or there's a hiccup in ramping up production, you'll see a reaction in the prices," said Mason Hamilton, a petroleum markets analyst for the Energy Information Administration.

The volatility caught the attention of Dick Benson of Batavia, who pointed out his local gas station raised the price from $1.96 last week to $2.86 Wednesday, which doesn't reflect the roller-coaster ups and downs of oil by the barrel.

Hamilton noted when there's a lot of winter-grade gas left, prices go down so suppliers can get rid of it. That can account for sticker shock with the introduction of the summer blend.

                                                                                                                                                                                                                       
 

Argonne National Laboratory energy researcher Don Hillebrand is familiar with seasonal price variations, but he raises his eyebrows at "that big of a price jump."

In late 2014, when the bottom dropped out of oil prices, "it caught everybody by surprise ... so it's a bit of a natural rebound," said Hillebrand, director of Argonne's Center for Transportation Research. "(Gas) is so inexpensive, companies are realizing there's room to price it up a little."

Overall, analysts predict the national average won't surpass $3 a gallon this summer. That's due in part to increased production, meaning a surplus supply of domestic oil, and lowered demand as vehicles grow increasingly fuel-efficient.

"We're in an unusual situation where stocks of oil and gas are at an 80-year high," Hillebrand said.

AAA anticipates a mild year and a mild summer for pricing, Mosher said. "Illinois is always higher than national (gas) prices, and we think it will continue to rise, but it will be nowhere near what we've seen in years past."

One trend that should pain premium gas purchasers is a widening gap between its cost and that of regular. The price differential was 27 cents in 2009 and 45 cents in 2014, the AAA's Avery Ash said.

"This change is reflective of refining trends and overall demand for premium gasoline," Ash said. "In order to produce gasoline with higher levels of octane, refineries must reduce their overall production volume. This can raise the relative price of premium gasoline in comparison to its lower-octane counterparts."

Also, "consumption of premium gasoline has trended downward for more than two decades, making it less competitive from a price standpoint. There's less of a market for premium," Ash said, "so we've seen prices squeezed higher."

• Daily Herald staff writer Mark Welsh contributed to this report.

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